Short Sales and Foreclosures used to be two sale conditions where there was a HUGE expectation of value for real estate buyers. Buyers felt that the “Bank's Loss” would be their financial gain. In today’s real estate market on Oahu, this is not as true as it used to be. Years ago, a home would be listed for sale it in its neighborhood. The seller would ask any amount they wanted to for their home and buyers would come and make offers for that home. The Market Price or Actual Value was determined by the amount the seller and buyer agreed to accept from each other.
Then came the Short Sale; A short sale occurs when a bank agrees to accept less for a home than is actually owed on it. I should say it is when a bank agrees to allow a transfer of ownership of the home for less than is owed on it at the time of the transfer. The seller may or may not have to pay the difference at a later date.
What short sales did to the market value of similar homes in their neighborhoods was to lower their value. This was especially true in the beginning. Now sellers had another force determining what the value of their home was, when their home was near to a home that was sold as a short sale. Homes often sold for 10% to 20% below actual market value. This is true for Mililani, Hawaii Kai, Kailua, Aiea and most of the other areas of Oahu.
This is part of what helped to bring home prices down across the board. Today, many areas of Oahu have “Readjusted” in value. Short sales don’t stand out as the least expensive home is the area anymore. Sellers have found that their homes will not sell if they are far more expensive than the short sale up the street and as a result, sellers have become much more realistic in their list prices. This is not always true but it is most of the time.
Buyers today need Realtors that understand where the market is at. Telling a seller what it is they want to hear might get a realtor a listing but it will not necessarily get them a sold price any higher than that of a Realtor that is straight forward. The best thing for sellers to do is look at what has sold in their neighborhood over the past 90 to 180 days and let those numbers guide them in setting their list price.
Buyers don’t be headstrong in only looking at Short Sales and Foreclosures. Sellers have wised up in their asking prices to you may not even have to worry about risks of buying short sales and foreclosed properties.
If you would like to search Short Sale and Foreclosed Properties, even after all I have said, OK then…Here you go. Click here to see only Short Sale and Foreclosures along the south shore of Oahu.
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